Buying stocks right now is a tricky thing to do when the markets are in freefall. 

The S&P 1500 is down 17.1% year-to-date through May 25. If you check the three indexes that make up the broader-market index -- S&P 500, S&P MidCap 400, and S&P SmallCap 600 -- you’ll see that they are all down double digits in 2022. 

It’s turning out to be the worst year for stocks since 2008.

However, all is not lost if you’re a company flush with cash. It’s the perfect time to repurchase stock. A quick search finds that 59 of the constituents in the S&P 1500 announced stock buybacks in the past 30 days.

Here are three that investors can get behind. 

Tapestry - S&P 500

Tapestry (TPR), the holding company that owns Coach, Kate Spade, and Stuart Weitzman, reported strong Q3 2022 results in mid-May. I’ll get to some of the highlights, but first, I wanted to focus on the other piece of news. 

The company announced a $1.5 billion share repurchase program that will begin in July. In the meantime, it still has $350 million on its previous buyback. It intends to make good on these purchases between April 2 and the end of June. 

So, Tapestry will repurchase $1.6 billion of its stock in fiscal 2022, $350 million higher than its original goal for the year. In the first nine months of fiscal 2022, it repurchased 31 million shares at an average price of $39.88.

While the buyback doesn’t look good at current prices, the company’s financials are rock solid. Ultimately, these buybacks will pay big dividends to shareholders. Remember, TPR stock once traded close to $80 in March 2012.

Based on its current market cap of $7.95 billion, Tapestry’s $1.5-billion buyback in 2023 is equivalent to 19% of its stock. 

How cheap is TPR stock?

It has a trailing 12-month free cash flow (FCF) of $873 million. That’s an FCF yield of 11%. I consider anything above 8% to be value territory. 

With one quarter left in fiscal 2022, Tapestry expects sales of $6.7 billion -- high-teens growth year-over-year -- and earnings per share of $3.45, nearly 20% higher than a year earlier.

Tapestry is priced to move. 

Builders FirstSource - S&P MidCap 400

Builders FirstSource (BLDR) manufactures and supplies building materials for professional and consumer markets for new construction, renovation, and remodeling. It has 565 locations in 42 states. 

On May 10, it announced the board approved a new $2 billion share repurchase program. At the same time, it reported Q1 2022 results that included a 15.0% increase in organic sales due to the construction of single-family homes. Its adjusted net income increased by 136.5% to $700.8 million during the quarter. Profits were higher due to the significant increase in sales combined with a 670 basis point increase in its gross margin. 

Sure, residential construction has weakened in recent weeks -- April’s single-family permits declined 4.6% -- but the company said in its May Q1 2022 press release that it expects free cash flow in 2022 of at least $2.0 billion, perhaps as high as $2.4 billion.

How were buybacks in the first quarter?

The company bought back $286 million of its stock at an average price of $79.58. In April, as stocks were experiencing broad-based weakness, Builders bought back $267 million of its stock at an average price of $62.21, where it’s currently trading. 

Since August 2021, it’s repurchased 17% of its share count for $2.3 billion or an average of $65.10 a share. 

I expect the company to continue to buy its stock on further weakness. If it falls into the $50s, the Q2 2022 report will include significant share repurchases. 

Long-term, it’s a good use of its free cash. 

Gibraltar Industries - S&P SmallCap 600

The Buffalo-based company manufactures products and provides services for four markets: Renewable energy, residential, agtech, and infrastructure.

In Q1 2022, Gibraltar’s (ROCK) sales were $316.0 million, 11.8% higher than a year earlier, while its EPS was 11.1% higher to $0.60. The company’s residential business makes products such as metal roofing, mailboxes, parcel lockers, ventilation products, outdoor awnings, gutter guards, and many other things to keep your home in good shape. The division accounts for 57% of overall sales and almost all its operating income. 

I’ve included two building products companies because they’re different market caps. I don’t expect someone reading this to buy both of them. Not to mention Builders FirstSource is growing at a much faster pace. It’s a growth play, whereas Gibraltar's more of a value play. 

However, they’re both buying back a ton of stock.

In Gibraltar's case, it announced a $200 million share repurchase program on May 4. That’s 15% of its current market cap. However, before you get too excited, the buyback is over three years ending on May 2, 2025.

“Given the strength of our balance sheet and our expectation that we will generate increasing cash flow in 2022 and in the coming years, we have sufficient liquidity to both invest in our operations and to offer incremental returns to shareholders,” CEO Bill Bosway stated in its May 4 press release. 

Historically, the company has not repurchased much of its stock. Gibraltar repurchased just $30 million in the past five fiscal years or 15% of its new program.

In 2021, its free cash flow was 0.4% of its sales. Historically, it’s been in the high single digits. In 2022, management expects it to be approximately 10%. Based on projected sales of at least $1.38 billion, it could make a big dent in the $200 million.